Correlation Between Publicis Groupe and SILVER BULLET

Can any of the company-specific risk be diversified away by investing in both Publicis Groupe and SILVER BULLET at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Publicis Groupe and SILVER BULLET into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Publicis Groupe SA and SILVER BULLET DATA, you can compare the effects of market volatilities on Publicis Groupe and SILVER BULLET and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Publicis Groupe with a short position of SILVER BULLET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Publicis Groupe and SILVER BULLET.

Diversification Opportunities for Publicis Groupe and SILVER BULLET

0.31

Correlation Coefficient

Publicis Groupe  SILVER BULLET

Weak diversification

The 3 months correlation between Publicis and SILVER is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Publicis Groupe SA and SILVER BULLET DATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILVER BULLET DATA and Publicis Groupe is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Publicis Groupe SA are associated (or correlated) with SILVER BULLET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILVER BULLET DATA has no effect on the direction of Publicis Groupe i.e., Publicis Groupe and SILVER BULLET go up and down completely randomly.

Pair Corralation between Publicis Groupe and SILVER BULLET

Assuming the 90 days horizon Publicis Groupe is expected to generate 10.28 times less return on investment than SILVER BULLET. But when comparing it to its historical volatility, Publicis Groupe SA is 1.7 times less risky than SILVER BULLET. It trades about 0.01 of its potential returns per unit of risk. SILVER BULLET DATA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  60.00  in SILVER BULLET DATA on October 25, 2024 and sell it today you would earn a total of  6.00  from holding SILVER BULLET DATA or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Publicis Groupe SA  vs.  SILVER BULLET DATA

Publicis Groupe SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Publicis Groupe SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Publicis Groupe is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SILVER BULLET DATA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SILVER BULLET DATA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SILVER BULLET may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Publicis Groupe and SILVER BULLET

The main advantage of trading using opposite Publicis Groupe and SILVER BULLET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Publicis Groupe position performs unexpectedly, SILVER BULLET can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SILVER BULLET will offset losses from the drop in SILVER BULLET's long position.

The idea behind Publicis Groupe SA and SILVER BULLET DATA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.